Donald McKinney, Plaintiff, v. UNITED STATES ROOFING CORPORATION (2023)

In this construction-related personal-injury action, the court previously denied the motion of third-party defendant United States Roofing Corp. for summary judgment dismissing the contractual-indemnification claim of defendant Tishman Construction Corp. (See McKinney v Empire State Dev. Corp., 2022 NY Slip Op 50349[U], at *6-7 & n 3 [Sup Ct, NY County May 5, 2022].) US Roofing now moves to reargue the denial of its summary-judgment motion. Leave to reargue is granted. On reargument, this court adheres to its prior determination.

DISCUSSION

I. Whether Negligence by US Roofing is Required to Trigger its Indemnity Obligation to Tishman

On the prior motion, Tishman and US Roofing disputed whether or not US Roofing had an obligation to indemnify Tishman absent negligence on US Roofing's part. This court concluded that as long as the costs at issue borne by Tishman arose out of US Roofing's operations, US Roofing had to indemnify Tishman for those costs even absent negligence.

In seeking reargument, US Roofing contends that this court erred in two related ways: First, that the court should have held that the claims against Tishman arose in connection with specific acts or omissions by US Roofing, not merely in connection with US Roofing's operations generally; and second, that this "acts or omissions" requirement meant that US Roofing had to have behaved negligently to trigger its indemnity obligation to Tishman. This court agrees with US Roofing's first contention, but not its second.

1. The indemnity provision provides that US Roofing shall indemnify Tishman for costs arising out of or resulting from "the acts or omissions of [US Roofing], or anyone for whose acts [US Roofing] may be liable, in connection with the Contract Documents, the performance of, or failure to perform, the Work, or [US Roofing's] operations, including the performance of the obligations set forth in this clause." (NYSCEF No. 185 at 5.)

This court previously interpreted this language as requiring US Roofing to indemnify Tishman in three circumstances: When claims against Tishman arose out of or resulted from: "(1) [US Roofing's] own acts or omissions, (2) its performance or failure to perform work, or (3) its operations." (McKinney, 2022 NY Slip Op 50349[U], at 6 n 3.) The court now concludes that this interpretation is erroneous.

That is, this reading of the indemnity provision would require, in effect, indemnification when Tishman's claims or losses arise from (i) the acts or omissions of US Roofing (or those for whom US Roofing is responsible) "in connection with the Contract Documents"; or (ii) US Roofing's performance of, or failure to perform the contract work; or (iii) US Roofing's operations. (Id.) On further reflection, this court does not see why it would be reasonable to limit the "acts or omissions" requirement only to conduct by US Roofing "in connection with the Contract Documents," rather than applying the requirement consistently to all three sources of claims against Tishman that are enumerated in the provision.

This court concludes instead that the better reading of this language is that it proceeds in two stages. First, it identifies two potential parties whose acts or omissions may give rise to an indemnity obligation: (i) US Roofing and (ii) "anyone for whose acts [US Roofing] may be liable." (NYSCEF No. 185 at 5.) Second, it provides that indemnification is required when acts or omissions by either of those two parties occur "in connection with" (i) the contract documents; or (ii) the performance of (or lack of performance of) the contracted-for work; or (iii) or US Roofing's operations more broadly. (Id.)

2. US Roofing contends that the indemnity provision's "acts or omissions" requirement means that the provision is triggered only upon US Roofing's negligence. This court disagrees. In Cackett v Gladden Properties, LLC, the Appellate Division, First Department, dealt with a provision requiring a subcontractor to indemnify the general contractor "for claims arising from acts or omissions 'in connection with the performance of any work by or for' " the subcontractor. (183 AD3d 419, 421-422 [1st Dept 2020] [internal quotation marks in original].¹ ) In considering a contractual-indemnification claim by the general contractor against the subcontractor, the First Department held that "while there is no evidence that any negligence on [the subcontractor's] part contributed to plaintiff's accident," the subcontractor's "duty to indemnify under the agreement" nonetheless "was triggered by the fact that the accident arose from plaintiff's performance of his work as an employee" of the subcontractor. (Id. at 422 [internal quotation marks omitted].) In short, "acts or omissions" language in an indemnity provision, does not, standing alone, require negligence on the part of the indemnitor to trigger the indemnity obligation.

In contending otherwise, US Roofing misplaces its reliance on the Court of Appeals' decision in Burlington Insurance Co. v New York City Transit Authority.² (See NYSCEF No. 337 at 4-5, citing 29 NY3d 313 [2017].) That case concerned additional-insured endorsement that "provid[ed] coverage for accidents caused, in whole or in part, by the acts or omissions of the named insured." (NYSCEF No. 337 at 5 [emphasis added; internal quotation marks omitted].) The Court addressed only whether that "caused by" language imposed a proximate-cause requirement for triggering additional-insured coverage. And in holding that it does carry with it a proximate-cause requirement, the Court carefully distinguished "caused by" from "arising out of"—the language in the indemnity provision here. (See 29 NY3d at 323-324.)

II. Whether the Claims Against Tishman Arise Out of Acts or Omissions by US Roofing

Given this court's conclusion about the scope of the indemnity provision at issue here, the question becomes whether US Roofing has shown as a matter of law that the claims against Tishman in this case (along with defense costs and any potential recovery against Tishman) arose out of acts or omissions by US Roofing in connection with its operations or its performance of the contracted-for work. This court concludes that US Roofing has not made that showing.

"Arising out of" has a broad meaning—"originating from, incident to, or having connection with." (Id. at 324 [internal quotation marks and citations omitted].) Here, the record contains evidence that US Roofing, like all the subcontractors on the project who came into contact with the scaffolding at issue, was contractually required to inspect the scaffolding daily (see NYSCEF No. 185 at 80-81), and to notify Tishman "[i]f they saw anything they thought was deficient" (NYSCEF No. 169 at Tr. 47 [deposition of Tishman superintendent]). A connection thus existed between (i) US Roofing's daily inspection not revealing a clearance problem with the scaffold (and US Roofing not bringing that problem to Tishman's attention), and (ii) plaintiff's striking his head on that scaffold and injuring himself. That is sufficient to trigger US Roofing's contractual obligation to indemnify Tishman.

III. Whether this Court Should Grant Conditional Summary Judgment to Tishman

US Roofing also argues that this court erred in conditionally granting summary judgment to Tishman on its indemnity claim. This court finds this argument unpersuasive.

To be sure, as US Roofing emphasizes in its memorandum of law, it is improper to grant conditional summary judgment on an indemnity claim when "an issue of fact exists as to whether the owner or general contractor's negligence was the sole proximate cause of the underlying claim," because doing so would run afoul of General Obligation Law § 5-322.1. (NYSCEF No. 337 at 6, quoting Cackett, 183 AD3d at 422 [emphasis added].) But this court's summary-judgment decision took this principle into account: It held that given the evidence "that Atlantic installed the scaffolding, ADCO provided the temporary lighting . . . and US Roofing was required to inspect the scaffolding before using it," no reasonable jury could find that any negligence by Tishman was the sole proximate cause of plaintiff's injuries. (McKinney, 2022 NY Slip Op 50349[U], at *7.)

Plaintiff criticizes the court's holding on this point on the ground that the court also left open the possibility that plaintiff could recover against Tishman on his Labor Law § 200 negligence claim. But negligent and solely negligent are not the same. Plaintiff's argument leaves intact this court's conclusion that no reasonable jury could find Tishman—and only Tishman—liable in negligence for plaintiff's injuries.

Accordingly, it is

ORDERED that the branch of plaintiff's motion seeking leave to reargue this court's order entered May 6, 2022, is granted; and it is further

ORDERED that upon reargument, this court adheres to its original decision.

DATE 2/21/2023

FOOTNOTES

1.   The full indemnification provision appears at Cackett v Gladden Properties, LLC, Index No. 157267/2014, NYSCEF No. 382, at 2 ¶ 6.

2.   US Roofing also cites two decisions of Supreme Court, New York County, and a decision of the Appellate Term, First Department. (See NYSCEF No. 337 at 5.) Those decisions, though, each preceded Cackett and thus cannot supply guidance here.

Gerald Lebovits, J.